Product Design Pricing Guide 2024

Are you aware of the cost of a new product design project? Learn how design firms charge for design projects.

Manufacturing and testing high-quality physical and digital products can come at considerable development costs. Product design is necessary to bring together user experience, brand identity, and the physical product itself so the end-product functions harmoniously.

Clients of all sizes, entrepreneurs, startups, or large corporations, aim to develop great products that resonate with customers and address relevant needs. Without a strong product design, company solutions may seem unappealing or the useful qualities of the product may be clouded by a confusing user interface.

Product design agencies are dedicated to helping their clients achieve effective products that accurately reflect their value delivery and the brand they represent. It doesn’t matter if you’re developing a physical prototype or searching for a web design solution—outsourcing product design can keep all areas of your design consistent and engaging. 

By leveraging their extensive experience and industry insights, product design firms can tackle complex challenges and introduce innovative solutions that might be beyond the capabilities of in-house teams. Furthermore, the streamlined collaboration and project management offered by these agencies can significantly reduce development cycles, allowing businesses to bring their products to market faster.

As shown above, the cost of product design engagements on Clutch is wide-ranging, spanning thousands of dollars. While this appears nebulous, several indicators can dictate the cost of a project that we will discuss throughout this guide.

Product Design Services Costs by Service Type

Product design can encompass both traditional manufactured products and digital assets, which makes for a vast industry of specialists. It’s important that you connect with agencies and freelance designers that can deliver the skills and project management you need to achieve success.

That said, the particular skills and specialists you seek can determine pricing. The table below breaks down possible areas of specialization and what agencies on Clutch charge for those skills.

How Much Does Product Design Cost in 2024?

The average cost of hiring a product design agency on Clutch is between $25–$49 per hour. These fees may include the cost of a team of project managers, UX designers, and others, and also encompass the costs of their output.

It’s important to note that the complexity of the product that needs design work will be the main driver of cost. A project that needs a large team and cutting-edge resources will cost more than one that only requires a simple approach (think: custom solutions vs. templates).

Product Design Agency Rates and Pricing Models Vary

One way to learn more about product design pricing is by learning more about pricing models, fees, and how agencies may charge for their work. Below are the most common agency pricing models for product design.

• Fixed Price: a set price is charged for the entire project based on the scope of work, project complexity, and expected timeline.
• Hourly Rate: a set price is charged per hour for the individuals staffed on the project. These rates will depend on the type of service you need from your product design team.
• Retainer: a fixed amount monthly or quarterly charge for a recurring number of hours or product design tasks. Retainers are intended to be a cost-effective solution for long-term projects.

Understanding pricing models means that you know more about what agencies will charge at different points in your partnership with them. Regardless of budget, this will help you avoid sticker shock downstream.

Watch Out for Fees During the Product Design Process

In addition to these pricing models, product design agencies may charge additional fees for prototyping, user research, or usability testing services. These fees are typically based on the effort required for these services.

For example, if you choose to sign a contract that charges a flat fee, there may be add-on costs if you choose to expand the scope later on in the collaboration.

Companies that know what they’re looking for from the beginning of the project will be in the best position to avoid additional costs that will surprise them down the line.

Why Do Companies Invest in Product Design Services?

Product design services are critical to effective product development because they help teams build the type of product users will enjoy and benefit from. The reason for outsourcing this work to a team of professionals is due to their ability to deliver high-quality work against the following major goals.

User-Centered Design

Agencies are focused on creating the best possible design for users to engage with and access. User-centered design accounts for accessibility and UX design standards that will keep products up-to-date and optimized. 

Further, these benefits, paired with a thorough understanding of your audience, will enable a product design agency to deliver according to user preferences, making end products more intuitive and enjoyable for users.

Innovation and Creativity

One main reason to hire a seasoned product design company is the creativity and fresh perspective they bring to every new project. Agencies innovate every day and understand a wide variety of audiences. They can leverage their extensive experience across various industries to infuse your product with unique, cutting-edge designs that stand out in the market.

Ultimately, their ability to combine aesthetic appeal with functional design ensures that your product looks great and delivers an exceptional user experience.

They can bring all of their learning to your product idea, leaving you with more unique concepts that will differentiate your business within your industry. 

Faster Time-to-Market

Plenty of companies don’t have their own product design team in-house. Because of this, a product design project may be particularly taxing on available in-house resources. On top of that, freelance designers can’t offer you the project management or cohesion you need to launch quickly. 

Agencies have the knowledge and resources to handle rapid prototyping and testing timelines, meaning clients can bring products to market faster. Under this process, companies can point out design errors more quickly and address issues before they cause harm. 

What Services Can Product Design Companies Deliver?

From UI design to graphic design work, product design efforts are necessary for accessible solutions that make an impact on users. When working on your contract with a product design agency, consider their help in the following popular areas.

• Concept Development: generation of new product ideas based on market research, user needs, and business goals. They can help companies identify opportunities for innovation and differentiation from targeted competitors that they can then carry through in their design work.
• Prototyping and Testing: building prototypes of designs before testing them to ensure they are functional. Physical prototypes are generally tested using materials and technologies that simulate the final product, while digital prototypes are tested with simulations and user testing.
• User Research and Usability Testing: conducting user research to understand needs, preferences, and behaviors. Usability testing helps to evaluate the effectiveness of product designs with actual users (not just simulated environments).
• Industrial Design: construction of functional product designs that factor in the manufacturing process, materials, and technologies involved in production.

All different types of product design exist and are equally needed to create a successful product.

Factors That Influence Product Design Costs

The cost of product design is dictated by several factors, which means that some more complex tasks will always cost a bit more than others, regardless of who you go to for the work. This aside, those crafting their budgets can find wiggle room by making strategic compromises in any of these categories to save precious dollars.

• Scope of Work: As stated above, complex projects make for higher design costs. Additionally, the number of products being designed, design complexity, the number of design iterations required, and the level of necessary detail will dictate what is contained within the bounds of your SOW.
• Specialization Requirements: Agencies with specialized knowledge may charge higher fees than those with fewer years of experience or with less specialization. Certain agencies can offer more value in niche areas such as user research, prototyping, and manufacturing support.
• Intellectual Property Rights: If the product design agency is responsible for developing new product ideas, the agency may charge higher fees to cover the cost of developing and protecting intellectual property rights.
• Deliverables: If the project requires a physical prototype, the cost will be higher than if only digital prototypes are required. In the same vein, projects that need several design concepts will cost more than those that only need a single concept.

While these are the most significant drivers of pricing, that doesn’t mean they’re the only elements that can make for a costly product design effort. Consult with shortlisted design agencies to learn more about how they charge clients.

Budget for Product Design Projects to Account for Design Prices

Some product builds will require computer science, and others need mechanical engineering. Regardless of the type of product, a smart concept and solid product designs are what make solutions usable and engaging for end users. Effective product design bridges the gap between the technical complexities of development and users' practical requirements.

By integrating multidisciplinary approaches, such as human-centered design and precision engineering, product design ensures that each product not only works flawlessly but also provides an intuitive and satisfying user experience. See where a product designer fits in your company's overall budget, and take your services to new heights.